Synopsis
Reliance Retail Ventures Ltd (RRVL) is reportedly reducing workforce and implementing cost-saving strategies due to slowing sales, as it prepares for its stock market debut. The company's valuation has been cut significantly, prompting a focus on enhancing financial performance before the IPO.Key Takeaways
- Job cuts at Reliance Retail Ventures Ltd.
- Valuation drop to $50 billion.
- Limiting expansion to boost valuations.
- Physical store presence reduced.
- Focus on digital commerce growth.
Mumbai/New Delhi, March 6 (NationPress) With concerns regarding a decline in sales, Reliance Retail Ventures Ltd (RRVL) is reportedly implementing job cuts and other cost-reduction strategies ahead of its anticipated stock market debut.
The rapid expansion of Reliance Retail has seemingly resulted in a valuation drop to $50 billion, which is half the amount it secured in funding two years ago.
Currently, the company is limiting its growth plans to enhance its valuations prior to the launch of its initial public offering, as per recent reports.
According to NDTV Profit, citing a Bloomberg report, "The valuation decline comes at a time when the conglomerate intends to list its retail division, which could be troubling for early investors, particularly since discussions of buybacks from high-profile investors have yielded minimal outcomes."
Furthermore, the company is reducing its physical store presence, cutting marketing expenditures, and integrating Reliance Brands Ltd. with its main retail entity, as mentioned in the report.
During the third quarter of the current fiscal year (Q3 FY25), the retail division's total store count reached 19,102, with foot traffic nearly hitting 30 crore, marking a 5 percent year-over-year increase.
"The emphasis on enhancing digital commerce and new commerce persisted, with these channels accounting for 18 percent of total revenue," the company stated.
Reliance Retail Ventures reported a 10 percent rise in its consolidated net profit for Q3 FY25, amounting to Rs 3,458 crore, compared to Rs 3,145 crore from the same period last year.
On a sequential basis, net profit surged by 22 percent, climbing from Rs 2,836 crore reported in Q2 FY25.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited, noted that with a focus on customer-centric innovation, the business continuously aims to improve the shopping experience for its customers through its extensive reach and ever-expanding product range.
Meanwhile, Jefferies has upheld its 'buy' recommendation on Reliance Industries Ltd, setting a target price of Rs 1,660 per share. The stock has become significant as it has dropped over 25 percent since its peak last year.
